The Missouri Swine Audit:

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4    FUTURE OF MISSOURI'S SWINE INDUSTRY

The following section describes the systems of swine production that currently exist in the Missouri and details the strengths, weaknesses, opportunities and threats associated with each.

4.1 Future Swine Production Systems in Missouri-SWOT Analysis

4.1.1 System 1: Farrow to Wean – 1,200 sows

Assumptions: 3 ½ people are required to produce 500+ pigs per week

Employee considerations are based on the number of people required to take care of pigs and provide production management combined with general maintenance in the form of water flow, feed delivery, curtain repair, heat lamps/hovers, lighting, cleaning, etc. The FTE requirement identified does not include labor for major maintenance, or financial or production records.

Strength:

  • Specialization of labor
  • Limited environmental challenges due to relatively small nutrient production
  • Relatively small natural resource base required to support operation (~ 150 acres of land, water, etc)
  • More likely to have protection from environmental extremes (housing)
  • Ability to limit pathogen exposure and produce high health status pigs
  • Select genetic lines that will determine market animal type
  • Economies of scale allow for best price purchasing of animal health supplies (biologicals, AI supplies, disinfectants, etc.)
  • Limited machinery required to operate day to day functions (30hp tractor)

Weakness:

  • Small feed volume requirement limits purchasing power and on site milling options
  • Highly capital-intensive production system that may limit independent entry (on per sow basis)
  • Limited machinery available for manure nutrient management (if operation is not managed in cooperation with a cropping operation)
  • Requires additional labor beyond immediate family members (husband and wife team)
  • Too low of production that is required to fill industry standard finishing facility

Opportunity:

  • Align with other entities to produce market animal (cooperative or contract agreement)
  • All input costs and associated expenses can be secured through contract agreements
  • Potential exist to produce breeding stock as a multiplier Ability to expand to 2,400 sows from 1,200 sows

Threat:

  • A contract used to manage risk can end unexpected or fail to be renewed
  • Economical viability of finishing facilities can influence validity of weaned pig contracts
  • Any pathogen introduction becomes pandemic in a naive population
  • Ability to pay salaries is limited by pig population and contract negotiations (may lead to labor turn over or family problems)

4.1.2 System 2: Farrow to Wean - 2400 sows

Assumptions: 5-6 people are required to produce 1,000+ pigs per week

Strength:

  • Specialization of labor
  • Increase labor utilization (less workers need in proportion to 1,200 sow operation)
  • Ability to fill a standard industry finishing facility on a weekly basis
  • Increased health standpoint of finishing when filling at one time
  • More likely to have protection from environmental extremes (housing)
  • Ability to limit pathogen exposure and produce high health status pigs
  • Select genetic lines that will determine market animal type
  • Slightly greater economies of scale allow for best price purchasing of animal health supplies (biologicals, AI supplies, disinfectants, etc.)
  • Limited machinery required to operate day to day functions (30hp tractor)
  • Ability to have an off-site acclimation facility

Weakness:

  • Small feed volume requirement limits purchasing power and on site milling options
  • Highly capital-intensive production system that may limit independent entry (on per sow basis)
  • Relatively larger natural resource base required to support operation (~ 300 acres of land, water, etc)
  • Limited machinery available for manure nutrient management (if operation is not managed in cooperation with a cropping operation)
  • Requires additional off-farm labor beyond family members (hired-labor concept) which creates labor vulnerability and high turnover rates (impacts production efficiency), manage people rather than pigs

Opportunity:

  • Align with other entities to produce market animal (cooperative or contract agreement)
  • All input costs and associated expenses can be secured through contract agreements
  • Potential exist to produce breeding stock as a multiplier
  • Ability to pay better salaries due to greater labor efficiencies
  • Ability to have on-site processing of semen and boars allowing for a closed herd with increased health status
  • Ability to improve cull sow market value

Threat:

  • A contract used to manage risk can end unexpected or fail to be renewed
  • Economical viability of finishing facilities can influence validity of weaned pig contracts
  • More at risk with any pathogen introduction becoming pandemic in a naive population
  • Limited environmental challenges due to relatively small nutrient production
  • Neighbor relations and community acceptance
  • Greater need for a stringent biosecurity plan

4.1.3 System 3: Farrow to Finish – 150 sow, Monthly Production

Assumptions: 1.5 people are required to produce 250 pigs month

Strength:

  • Low total capital investment
  • Typically a family operated business
  • More operational flexibility and greater ability to adapt to changes
  • Can be a part-time business, can include a cropping enterprise (fed own grain)
  • Ability to mix own feed (portable grind-mixer) low animal input costs
  • Limited environmental challenges due to relatively small nutrient production
  • Relatively small natural resource base required to support operation
  • Zero to minimal environmental regulations at this time, less community resistance and greater acceptance

Weakness:

  • Lack the economies of scale (low feed volume and other biological supplies)
  • Relatively low income (market ~ 3,000 pigs/yr resulting in $15,000 to $30,000 gross income)
  • Difficult to incorporate recycled females back into the operation flow
  • Limited ability to have separate site production
  • Limited access to capital
  • Inability to have a marketing contract based on production number limits
  • Inability to market all animals as a pot-load (requires a truck and a half to empty the barn)

Opportunity:

  • Ability to establish niche markets
  • Greater public perception image
  • Can easily utilize alternative production
  • Opportunity to expand/convert/specialize the operation
  • Ability to maintain a low debt

Threat:

  • Inability to generate sufficient income to support a family with small per head margins
  • Ability to access markets or shackle space
  • Environmental regulations change the cost of implementation may be prohibited
  • Lack of labor specialization

4.1.4 System 4: Farrow to Finish – 300 sow, Biweekly Production

Assumptions: 2½ people required

Strength:

  • Easier to market truck loads and empty barns at one time
  • Greater ability to utilize specialized labor
  • More opportunity to access marketing contracts
  • Ability to start supply procurement
  • Ability to be incorporated with a cropping system
  • Ability to mix own feed and utilize own grain

Weakness:

  • Lack the economies of scale (still minimal feed volume and other biological supplies)
  • More likely to hire labor (2 people or 2 families needed to operate)
  • Fall under the environmental regulations of CAFO

Opportunity:

  • Incorporation of separate site production
  • Some alternative production practices maybe incorporated
  • Access to capital is greater
  • Improved ability to manage risk
  • Opportunity to expand/convert/specialize the operation

Threat:

  • Environmental regulations and the costs associated with implementation
  • Less public acceptance
  • Vacation time compromises labor force

4.1.5 System 5: Farrow to Finish – 600 sow, Weekly Production

Assumptions: 4 people required

Strength:

  • Opportunity to breed, farrow and market pigs on a weekly basis
  • Sows that return to estrus are now able to fall back in to the next group easier.
  • Increased efficiency and predictability of pig flow with resulting increases in profitability
  • Ability to get marketing contracts (>10,000 head/year)

Weakness:

  • Increased labor requirement; may require hired labor that will have to be properly trained and supervised
  • Increased housing costs per animal unit
  • Less opportunity to utilize alternative production systems (such as hoop barns)
  • More fixed costs at risk to market down turn
  • Requirement of a permit
  • Less public acceptance
  • 1,200 acres will be required to spread manure

Opportunity:

  • Ability to become a contract producer
  • Greater landmass to grow crops and utilize manure nutrients
  • Labor specialization begins to become feasible

Threat:

  • Environmental regulations and the costs associated with implementations
  • Less public acceptance
  • Vacation tine compromises labor force
  • Time demands placed on labor if this unit also engages in a row crop operation
  • Potential exists for increasing regulatory requirements

4.1.6 System 6: Farrow to Finish - 1200 sow, Weekly Production

Assumptions: 6½ people required

Labor Comparisons of 600 versus 1,200 sows:
Sow
Inventory		 # pigs/year FTE’s
(50 hours/week)		 Work weeks/year Hours required
per pig
600 12,000 4 50 0.83
1,200 24,000 6.5 50 0.68

  • The sow inventory double however FTE’s only increase by 62.5 percent
  • The hours required per pig decreases by 0.15 hours

Strength:

  • Labor utilization and specialization associated with weekly production
  • Decreased labor per pig associated with prep time, clean up time etc.
  • Ability to pay quality employees a greater salary (see labor comparison below).
  • Ability to have a closed herd and have internal multiplication

Weakness:

  • Increased labor requirement; may require hired labor that will have to be properly trained and supervised
  • Increased housing costs per animal unit
  • Less opportunity to utilize alternative production systems (such as hoop barns)
  • More fixed costs at risk to market down turn
  • Requirement of a permit
  • Less public acceptance
  • Doubled capital requirement and increased risk and vulnerability to market down turns than the 600 sow
  • 2,400 acres required to spread manure

Opportunity:

  • 2,400 acres required for manure nutrient utilization is now approaching the amount of land required to employ a full time farmer

Threat:

  • Public acceptance
  • Difficulty sighting in Missouri with set back requirement restrictions and large land base required for manure nutrient management

4.1.7 System 7: Feeder to Finish – 2,000 head capacity

Assumptions: ½ people required

Strength:

  • Does not require full time employment and can meld with other enterprises (crops) or an off-farm job
  • Can use own farm raised corn creating an added value and greater flexibility
  • Small capital investment, comparable initial investment and land requirements to a 150 sow farrow-to-finish

Weakness:

  • Must be aligned with other partners
  • Partners must be able to supply a consistent, quality, right size groups
  • Need to align with a marketing contract
  • Small feed volume

Opportunity:

  • Can be a production contract to minimize risk
  • Can expand size of production
  • Minimize time to acquisition feed etc and decision making process
  • Have outside expertise available to handle health and production issues

Threat:

  • Vulnerability to upstream production and loss of contracts
  • Under current environmental permitting regulations but this situation is likely to change soon

4.1.8 System 8: Feeder to Finish – 4,000 head capacity

Assumptions: ¾ people required

Strength:

  • Does not require full time employment and can meld with other enterprises or part-time job
  • Comparable initial investment and land requirements to a 300 sow farrow-to finish
  • Eligible for marketing contracts

Weakness:

  • A environmentally regulated site, may lose some governmental program funds
  • Greater capital investment
Opportunity:
  • Can be a production contract that minimizes risk
    • Can expand size of production
    • Minimize time to acquire feed
    • Minimize decision making process
  • Have outside expertise available to handle health and production issues

Threat:

  • Less neighbor comfort or public acceptance
  • Vulnerability to upstream production and loss of contracts

4.1.9 System 9: Feeder to Finish – 8,000 head capacity

Assumptions: 1 person required

Strength:

  • Does require full time employment

Weakness:

  • Greater financial risk
  • Greater land base required
  • Greater risk for not being accepted in the neighborhood

Opportunity:

  • Open to all marketing and production contracts
  • Greater flexibility with the contracts (may have 2 different options)
  • Greater leverage for purchasing feed
  • Less susceptibility to price fluctuation (least cost averaging)
  • More frequent marketing and can manage price risk

Threat:

  • Less neighbor comfort or public acceptance,
  • Vulnerability to upstream production and loss of contracts

4.1.10 System 10: Wean to Finish – 2,000 head capacity

Assumptions: ½ people required

Strength:

  • Does not require full time employment and can meld with other enterprises (crops) or an off-farm job
  • Can use own farm raised corn creating an added value
  • Greater flexibility
  • Small capital investment
  • Comparable initial investment and land requirements to a 150 sow farrow-to finish
  • Consistent scheduling of pigs (2 turns/yr)

Weakness:

  • Must be aligned with other partners, partners must be able to supply a consistent, quality, right size groups
  • Need to align with a marketing contract
  • Relatively small feed volume
  • Scheduling of pigs could overlap with other enterprises
  • Intense specialized, baby pig management is required for a small amount of time (< 1 month) which may create labor challenges

Opportunity:

  • Can be a production contract that minimizes risk
    • Can expand size of production
    • Minimize time to acquire feed
    • Minimize decision making process
  • Have outside expertise available to handle health and production issues
  • Minimize labor (time) to clean facilities and move pigs
  • Can possible commingle pig sources due to the high antibody presence in early weaned pigs

Threat:

  • Vulnerability to upstream production and loss of contracts
  • Possible increase in utilities

4.1.11 System 11: Wean to Finish – 4,000 head capacity

Assumptions: ¾ people required

Strength:

  • Does not require full time employment and can meld with other enterprises or part-time job
  • Comparable initial investment and land requirements to a 300 sow farrow-to finish
  • Eligible for marketing contracts

Weakness:

  • A environmentally regulated site
  • Greater capital investment

Opportunity:

  • Can be a production contract
    • Minimizes risk
    • Can expand size of production
    • Minimize time to acquire feed
    • Minimize decision making process
  • Have outside expertise available to handle health and production issues

Threat:

  • Less neighbor comfort or public acceptance
  • Vulnerability to upstream production and loss of contracts

    4.1.12 System 12: Wean to Finish – 7,000 head capacity

    Assumptions:
    1 people required

    Strength:

  • Require full time employment (no need for hired labor)
  • Labor utilization and specialization associated with weekly production
  • Maximize economics of scale

    Weakness:

  • Greater financial risk
  • Greater land base required
  • Greater risk for not being accepted in the neighborhood

    Opportunity:

  • Open to all marketing and production contracts
  • Greater flexibility with the contracts (may have 2 different options)
  • Greater leverage for purchasing feed
  • Less susceptibility to price fluxuation (least cost averaging)
  • More frequent marketing and can manage price risk
  • Ability to expand to another building (1,000 head) if labor exists

    Threat:

  • Less neighbor comfort or public acceptance
  • Vulnerability to upstream production and loss of contracts

    4.2 Strategies to Improve Profitability on Missouri Swine Farms

    4.2.1 Tactic 1: Attaining/Maintaining High Health Status

    Profit conscience managers will implement production systems that will minimize the risk of production lost associated with endemic and non-endemic diseases by recognizing the roll of people and pigs in transmitting disease to other susceptible pigs. Every effort must be made to separate pigs by phase of production (breeding-gestation-farrowing, nursery, finishing) and educate employees on the way in which they move between these phases of production.

    Infectious diseases are transmitted by both direct and indirect contact. Some diseases such as atrophic rhinitis and Mycoplasma pneumonia are spread primarily by direct contact of one animal with another. Other pathogens are transmitted indirectly on clothing, hands, boots and shoes or through contamination of feed, water, vehicles, soil, bedding, air, utensils and premises. Pathogens transmitted via this means include: Actinobacillus pleuropneumonia, Brachyspira (Dysentery), Escherichia coli, Erysipelas, Pasteurella, Pseudorabies, Salmonella, Swine Influenza virus (SIV), Streptococcus, TGE and Tuberculosis. Leptospira and other disease agents may be carried from one premise to another in streams. Rodents also may be a factor. Birds have been shown to transmit TGE and Salmonellosis. External parasites and insects may also transmit disease.

    Pigs should be moved as a group during each production stage in an all-in/all-out manner. All-in/all-out flow is the concept of moving pigs of the same age at the same time. For example, a group of pigs is weaned from a farrowing room at the same time and moved to the nursery. After a set period of time, this same group of pigs is moved from the nursery to the grower and finisher. No pigs are added to the group or placed in a younger group and the facilities can be cleaned and disinfected before a new group enters. The use of all-in/all-out flow allows the pigs to be exposed to the same pathogens as their pen mates.

    4.2.2 Tactic 2: Maximizing Feed Efficiency

    A dependable and economical source of high quality feed is the backbone of a profitable swine operation. Approximately 50 to 70 percent of the total cost of pork production is feed; producers should be aware of all aspects of swine nutrition, feed management, and commodity buying. The most profitable diet and feeding strategy is that which most closely matches the pig’s potential for lean tissue growth. Many factors influence nutrient requirements and ultimately feed efficiency, such as changes in body weight, sex, genotype, environment, climate, health, grain quality, particle size and dietary composition are considered in the design of diets and feeding strategies for growing pigs. Several of these factors as well as overall management can enhance feed efficiency of swine operations.

    4.2.3 Tactic 3: Segregated Early Weaning

    Segregated early-weaning is a management practice that removes the nursing pig from the sow at less than 21 days of age in order to minimize pathogen exposure from the sow. From the nutrition focus, it is important to provide improvements in diets that will avoid the post-weaning lag that often occurs when pigs are weaned at this age. The primary objective is to entice the young pigs to start eating dried feed. Once the weaned pig is eating well the goal is to feed the most economical diet to ensure optimum performance.

    Definitely, early-weaned pigs require a complex diet consisting of high lactose products and/or specialized protein products. Pigs should be switched to lower cost grain-soybean meal diets with lower lysine concentrations within three weeks post-weaning.

    4.2.4 Tactic 4: Phase Feeding

    Phase feeding is a nutritional management practice that most closely matches the pigs’ potential for lean tissue growth. Ideally, swine nutritionists would like to change diets every day to meet the estimated nutrient requirements and minimize nutrient excretion. However, the following constraints make daily dietary changes difficult for swine producers.

    1. Inaccurate knowledge about daily lean growth potential
    2. Inability to establish accurate feed intake
    3. Feed delivery system (capacity and function)
    4. Group penning of pigs

    But, pork producers can change diets as often as weekly to minimize feed costs and maximize nutrient utilization. The nutrient recommendations are altered based on body weight (phase feeding), lean gain potential (300 g/d is average and 350 g/d is above average), and sex (split-sex feeding: feeding barrows and gilts separately) to accommodate for the known variations in amino acids and energy requirements that currently exist. For example, gilts require higher dietary concentrations of amino acids than barrows for optimum lean gain because barrows eat more feed; barrows gain about a 0.1 pound more per day; feed efficiency is in favor of gilts, about 0.1 to 0.2 pound of feed per pound of gain; gilts have about 0.2 inch less back fat than barrows; and gilts, in general, have larger loin eyes and about 2 to 3 percent more carcass muscle.

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